CORN HIGHLIGHTS:

• Corn futures posted a fourth consecutive day of losses as fund liquidation and technical selling continued to pressure the market. As key chart support levels failed, downside momentum accelerated. July corn lost 9 cents to 431 ½, and December corn lost 6 ¾ cents to 459 ¾.  July futures closed at their lowest level since August 12 last summer.
• Weekly ethanol production rose to 1.108 mb/d for the last week, up slightly from the previous week. 109 mb of corn was used in production of ethanol last week, which was just below the needed pace to reach the USDA target for the marketing year.
• USDA reported April corn grind for ethanol at 427.7 million bushels, falling nearly 22 million bushels below trade expectations and 18 million bushels below last year. Total corn used for ethanol from September through April now stands at 3.653 billion bushels, running behind the pace needed to achieve USDA’s annual forecast.
• USDA announced a flash export sale of corn on Wednesday morning.  South Korea stepped in and purchased 136,000 MT (5.4 mb) for the new crop year. This is the time of year the market shifts the focus to new crop sales versus old.
• Current U.S. weather models have turned warmer and wetter in extended forecasts as rainfall is predicted to be more widespread across the corn belt going into the end of the week. If realized, the forecast is very crop friendly.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower for the fourth consecutive day as funds continue to offload their net long positions across the ag complex. July soybeans lost 11-1/4 cents to $11.54 while November lost 10-1/2 cents to $11.67-1/4. July soybean meal closed down $5.40 to $320.80 and July soybean oil was up 0.30 cents to 78.71 cents.
• In Indonesia, palm oil exports for January through April rose 20% on the year to 7.7 million metric tons, which is valued at $8.22 billion. 1.9 mmt were exported in April alone. This comes as global demand for soybean oil and biofuels rise with the increasing prices of crude oil.
• Despite weakness in soybean futures, soybean crush margins continue to hold near historically strong levels. Robust demand for soybean oil has encouraged aggressive processing, which could help provide underlying support for new crop soybean demand as end users continue securing supplies.
• Attention now turns to Thursday’s USDA Export Sales report, with traders focused on new crop sales activity. China has yet to purchase any U.S. soybeans for new crop delivery and has instead been sourcing heavily from Brazil and Argentina during a period that traditionally favors U.S. export business.

WHEAT HIGHLIGHTS:

• Wheat futures extended their recent decline as harvest pressure, broad grain market weakness, and likely fund short-selling weighed on prices. All three U.S. wheat classes have become technically oversold, however – they may be due for a correction if they can find support. In the July contract, Chicago dropped 15-3/4 cents to 587-1/4, Kansas City fell 10-3/4 cents to 624, and MIAX closed 10-3/4 cents lower at 626-1/4.
• Ukrainian farmers are reportedly almost finished with spring grain planting. An estimated 5.84 million hectares have been sown, representing 97% of the planted area. Spring wheat specifically makes up a rather small portion of this total, at 186,000 hectares. Most of the area is taken up by corn, at 4.3 million hectares.
• The Russian agriculture ministry has stated that Russia’s wheat export tax will remain at zero for wheat, between June 3-9. Rates for corn and barley are also zero for this time period.
• The state grain buyer for Jordan is said to have purchased 60,000 mt of hard milling wheat in their tender, to be sourced from optional origins. It is believed to be sourced from Bulgaria, with the price paid at $276/mt on a CNF basis. Jordan is also expected to soon issue a new tender for 120,000 mt, with it closing on June 9.
• The French wheat crop condition is reported to have declined 3% this week to 78% good or excellent. While this is still above last year’s 70% rating, France has been dealing with a heat wave, leading to deteriorating crop conditions. Many other areas of Europe, however, have had showers that have helped to improve conditions.

DAIRY HIGHLIGHTS:

• Class III milk futures turned lower today, with the July contract settling 10 cents lower at $16.66.
• Spot cheese declined 0.375 cents to close at $1.45375/lb, while spot whey lost 0.25 cents, settling at $0.6750/lb.
• Class IV milk futures continued to give back recent gains today, with the July contract falling 25 cents to close at $20.64
• Spot butter was unchanged on the day, holding at $1.7100/lb. Meanwhile, spot nonfat dry milk (NDM) slipped 0.50 cents, closing at $2.1450/lb.
• May settlement prices came in at $16.92 for Class III and $22.32 for Class IV.

 Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of the National Futures Association. Stewart-Peterson Inc. is a publishing company. SP Risk Services LLC is an insurance agency. A customer may have relationships with all three companies. TFM Market Updates is a service of Stewart-Peterson Inc. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.

Author

Brandon Doherty